Q. My husband is retired for seven years now and is 67 years old. So far, we haven’t needed to use this money. We are trying to keep our income below $70,000 per year to stay eligible for our state property tax freeze, which is a significant saving of $2,000 or more per year.

1. What percentage or dollar amount are we required to take out each year?

2. Did I read correctly on someone’s question that if we set up a 10-year timetable we do NOT have to pay taxes on that money?

A. The required minimum distribution changes each year based on the account’s closing balance for the previous year and the account owner’s life expectancy. See IRS Publication 590 for the rules and a table of RMD factors for use in calculating the RMD for a given year.

There is no way to avoid the taxable income produced by RMD. That’s the point.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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